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| COMPLICATED NEGOTIATIONS BETWEEN GOVERNMENT AND UNIONS 11/07/2008 |
| (2008-07-11) |
| Last updated: 2008-07-14 16:49 EET |
After unions picketed the head offices of ministries in Bucharest and prefect’s offices around the country for a week, demanding a national minimum wage increase, on Thursday they had talks with the Prime Minister.
After five hours of intensive negotiations, leaders of major Romanian union confederations and Prime Minister Calin Popescu Tariceanu decided to postpone a decision until next week. Unionists demand a national minimum wage rise from 500 to 540 or even 600 lei, that is, about 170 Euro. This is the average salary in Romania. In Bucharest, which boasts the best paid jobs, the average salary is around 500 Euro. In the next round of negotiations, the Prime Minister also invited officials of the National Bank, an ally in the effort to keep inflation in check. Prime Minister Calin Popescu Tariceanu:
“We've had a first extensive discussion, with pros and cons put forth by both parties, and decided to carry on the dialogue and to request the views of the Central Bank on the matter. I'd like to emphasise that this decision requires careful analysis; it mustn't be made under pressure. I don't think Romania should do what it did in the past, when reckless pay rises led to a surging inflation which affected the economy and ultimately, people's spending power.”
The unionists, who agreed with the deferral, announced nonetheless that they would resume picketing actions. And, just like the Premier, the leader of the Cartel Alfa confederation Bogdan Hossu relies on support from the National Bank:
“The central bank will be consulted on the new simulation presented by the unions, which, at least in our opinion, proves that a salary increase would have a minor impact on inflation.”
We asked an impartial analyst, George Vulcanescu, to clarify the inflation and salary issues for us:
“There is an unclear aspect at this point, namely the extent to which the inflation was caused by the excessive money coming from the so-called electoral bribery – pension and salary increases late last year – and the extent to which it was caused by the rise of fuel prices. Because this is the core problem: if we find that inflation was mostly triggered by the rise in fuel prices, it is the government's duty to make up for some of the losses incurred by citizens. If, on the contrary, the inflation was mostly fuelled by salary increases and the boom in crediting, the Government may find arguments to convince the unions.
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